India is confident of steering the economy back to a high growth path of 8-9 percent soon as its economic fundamentals remain robust, bouncing from a slower growth of about 7 percent in the current fiscal year, President Pratibha Devisingh Patil said.
The long-term fundamentals of the Indian economy remain robust, Patil told lawmakers on Monday, adding the government plans to achieve a 9 percent annual growth target in the five-year plan period ending on March 31, 2017.
The Indian economy grew more than 9 percent for three years until 2007/08, and at an annual 8.4 percent in the last two fiscal years.
Finance Minister Pranab Mukherjee, who will present the federal budget on Friday, is expected to set a target of 7.5 percent to 8 percent economic growth for the 2012/13 fiscal year beginning on April 1.
After last year's budget debacle, when Mukherjee's projections for growth, asset sales and the fiscal deficit proved wildly optimistic, the pressure is on the government for a more realistic set of targets.
Efforts are underway to build political consensus on the Goods and Services Tax, which will give a major boost to the economy by rationalising indirect taxes and giving full input credit, Patil said.
The main opposition Bharatiya Janata Party has indicated support on non-controversial decisions, such as tweaking of tax exemptions for companies and moves to curb illicit fund flows.
Patil said the government aims to achieve an annual growth of 4 percent in the farm sector in the next five years and said it was confident of achieving the farm credit target of 4.75 trillion rupees (60.7 billion pounds) credit in the current fiscal year.
She said India expects to increase its merchandise exports to $500 billion (318 billion pounds) by 2013/14, from close to $300 billion (191 billion pounds) targeted in the current fiscal year.
(Additional reporting by Nigam Prusty; editing by Malini Menon)